What's Next?
Friends,
Just in case you’ve been stuck in a cave or maybe you were in a coma, the U.S. election took place this week and Republicans, under Donald Trump, won in a resounding manner.
Trump comfortably won in the Electoral College with 312 and won the popular vote as well by nearly 4 million.
Republicans in the Senate picked up four seats, winning a majority, and Republicans appear poised to return a narrow majority in the House of Representatives.
The Democratic Party will need to do some soul searching and come to grips with the political realignment that has been taking place across the United States since at least the Global Financial Crisis. As Noah Smith pointed out today in his Substack, Noahpinion, the Democratic Party has to contend with how working-class Americans view them (“The educated professional class is out of touch with America”… his post contains what I think is the meme of the week, take a look for yourself).
Vice President Harris did extremely well with highly educated, high-income voters, while President-elect Trump did extremely well with less educated, low-income voters. For the Democratic Party, this is a problem for the obvious reason that there are a lot more of the latter than the former.
These trends used to be reversed.
When Bill Clinton won re-election in 1996 against Bob Dole and Barack Obama won re-election in 2012 against Mitt Romney, the Democrats won the majority of less educated, low-income voters while their opponents won the majority of highly educated, high-income voters.
For decades it was common wisdom that maximizing voter turn-out would favor the Democratic Party as they did better with this larger cohort of voters.
On a vibe level, the Democratic Party portrayed itself as the representatives of the working class while portraying their opponents as out-of-touch elites who used their wealthy donors to rig the system.
President-elect Trump flipped the script and overturned how domestic American politics works. This will force the major parties in America to reevaluate their positions, change how they speak to voters, and determine the leaders they choose to represent their parties.
Whether this is a lasting realignment is another question that I will leave to the hundreds of commentators who focus on politics in America… obviously you don’t come here each week to read about that.
What should we expect next?
Like me, I’m sure the first question you asked yourself on Wednesday morning when you saw the results was: what does this mean for U.S. policy towards the China?
My first observation is that this is not terra incognita.
In many ways, President-elect Trump is an incumbent and we have a pretty clear picture of his top policy issue: fixing international trade.
For decades, President-elect Trump has been clear that he views trade deficits as the most serious problem facing the United States. He is not hiding this, he is transparent about what he thinks and how he wants to fix it. In his first term, he promised to impose economic costs on countries that have a trade surplus with the United States and he did so despite howls of protest from groups within the United States and in foreign capitals (ally and rival alike).
He views the balance of trade between the United States and another country as the most important issue in bilateral relations. He views allies that maintain a trade surplus, while simultaneously relying on American security guarantees, as particularly onerous. He threatens to withdraw those guarantees to pressure greater defense burden sharing and to reduce trade imbalances.
I think we should expect to see more of that over the next four years.
When it comes to trade deficits, President-elect Trump views the PRC as the worst offender. He views his predecessors attempts to negotiate and persuade Chinese leaders as three decades of unmitigated failure. He believes he has a mandate to fix the trade imbalance with the PRC using all means at his disposal. He doesn’t want a conflict with Beijing or to end Sino-American trade, but he will try to achieve an outcome in which the PRC imports more from the United States, than the United States imports from the PRC. He is likely to enter office in January presuming that Xi Jinping and other Chinese leaders will NOT negotiate in good faith and that only by applying massive economic costs on the PRC will he be able to achieve his objectives in lowering the trade deficit with China.
Over the past few days, I have lost count of the number of journalists, think tankers, and researchers who have reached out to get my impression of what to expect from a second Trump Administration on China policy.
The first thing I advise is read Bob Lighthizer’s 2023 book, No Trade Is Free: Changing Course, Taking on China, and Helping America's Workers. Lighthizer served as the U.S. Trade Representative during the first Trump Administration and his account provides an insight into President Trump’s worldview during his first term. I don’t think there is any reason to believe that his second term will deviate from that worldview.
In Chapter 3, Lighthizer describes four basic concepts of trade policy which he felt were obvious for much of American history but had been ignored since the end of the first cold war and the creation of the World Trade Organization:
“Number one, don’t allow your geopolitical adversaries to benefit from the U.S. market. Number two, use access to the U.S. market as leverage in trade negotiations. Number three, don’t hesitate to use trade policy as necessary to make the kind of economy you want Americans to have. Number four, act unilaterally when needed.”
My advice is to take out a notecard, write those four concepts down, and when you are confused about what the U.S. Government is doing over the next four years, refer to that card.
Orbiting the Sun of Trade Policy
ChatGPT image of planets orbiting “Trade Policy”
Unlike previous presidential administrations, international trade is THE top tier policy issue; all other policy issues orbit the sun of trade policy. This was very hard for folks to comprehend during the first term because in other administrations trade policy was a backwater, something the President pays scant attention to. Other administrations, put different topics at the center like human rights, national security, democracy promotion, or domestic policy.
President-elect Trump rejects those alternative framings and places international trade policy at the center.
How all of this will manifest in a second term depends greatly on the individuals that the President-elect picks for key positions. In other administrations, the key positions are usually the National Security Advisor, the Secretary of State, the Secretary of Defense, and the Director of National Intelligence (DNI). I think there is good reason to believe that the key positions in a Trump Administration will be the U.S. Trade Representative, the Director of the National Economic Council, the Secretary of the Treasury, and the Secretary of Commerce. My prediction is that foreign and domestic policy will be driven through the lens of international trade policy with the Secretary of State, the Secretary of Defense, the National Security Advisor, and the DNI playing supporting roles.
Given that folks are likely less familiar with these issues, I recommend reading Douglas Irwin’s 2017 book, Clashing Over Commerce: A History of U.S. Trade Policy. It’s the best (and only) detailed history of this issue and helps put in context how this oft ignored aspect of federal policymaking plays an important role. Having finished the book last year, I came away with the impression that there truly is nothing new under the sun. Hint: erecting a protective tariff barrier isn’t new and the U.S. Constitution does not include any requirement to extend “most favored nation” status or “permanent normal trade relations” to any country.
While you’re at it, I recommend reading (or re-reading) the 2020 book by Matthew Klein and Michael Pettis titled Trade Wars Are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace. I don’t agree with everything they argue, but I think they make a few important points. First, that disputes over trade and how the global economy functions are at the root of much of the geopolitical tension in the world. Second, that while these appear to be conflicts between nations, they are just as much or more, conflicts between classes within nations. Third, PRC policies which transfer wealth from workers to the owners of the means of production (the Chinese Communist Party) drive these tensions which manifest as massive current account surpluses and overcapacity. Policy decisions by elites in the PRC have spillover effects around the world and wreak havoc on domestic stability in other countries (see Germany below).
I think these dynamics are incredibly important to watch and the consequences have yet to fully play out.
Lastly, I recommend reading two more books, Rana Foroohar’s 2022 book, Homecoming: The Path to Prosperity in a Post-Global World and Mathias Döpfner’s 2023 book The Trade Trap: How to Stop Doing Business with Dictators. Rana Foroohar is the global business columnist and associate editor of the Financial Times and Mathias Döpfner is the Chairman and CEO of Axel Springer which owns media outlets like Politico and is the largest digital publisher in Europe.
All these authors provide insight into the issues that are at the heart of what a second Trump Administration will be trying to address. Some aspects of what I expect a Trump Administration will focus on will resemble President Biden’s foreign policy for a middle class, which Jake Sullivan championed early in the Administration and which shaped much of the early approach to China (see the February 2022 White House Indo-Pacific Strategy and the concepts behind the Indo-Pacific Economic Framework).
***
Collapse of the German coalition Government
About 12 hours after President-elect Trump’s victory was announced, the German government collapsed in Berlin.
Chancellor Olaf Scholz of the German Social Democrats (SPD) called his coalition partners together at the Chancellery on Wednesday afternoon to consider the impacts of Trump’s victory and within a few hours, Scholz had fired his finance minister and the leader of the Free Democratic Party (FDP) Christian Lindner. The center-left SPD and the center-right FDP had clashed on spending and economic reforms, with Lindner standing firm that debt limits on German Government spending could not be lifted and that there would need to be significant cuts to programs favored by both the SPD, as well as their third coalition partner, the Greens.
By firing Lindner, Scholz sets the stage for a confidence vote that will take place on January 15.
Presuming the current government loses that vote (which is almost certain), that will trigger a snap election to take place a few months later (yeah, I know what you’re thinking, Germans clearly have a different definition for the word “snap”).
All this means is that it could be another 6-8 months before the German Government is stable again and possesses a mandate to govern. And given the divisions across the German electorate with economic growth near zero, it is doubtful that any party will gain a clear mandate, which simply extends this period of uncertainty.
In this period of uncertainty, we should expect Beijing to take advantage of the situation in concert with German industry leaders. The Rhodium Group released a report last week pointing out these trends, “Don’t Stop Believin’: The Inexorable Rise of German FDI in China.” German automakers are shutting factories in Germany, which is spawning strikes, while pouring more investment into manufacturing in the PRC. This is the worst time for the German Government to be rudderless.
The impact of this week means that both Germany and Japan (the fourth and fifth largest economies) are in political limbo for the foreseeable future. The same holds true for both France and Canada, as President Macron and Prime Minister Trudeau are both weakened and likely to be replaced within the next year.
Happy Veterans Day and Remembrance Day!
Thanks for reading!
Matt
MUST READ
1. China unveils $1.4tn debt swap program to ease local government pain
Stella Yifan Xie and Wataru Suzuki, Nikkei Asia, November 8, 2024
China's top legislature on Friday said it will increase the limit of local government bonds to replace hidden debt, bringing the total value of the program to 10 trillion yuan ($1.4 trillion) and taking another step to reinvigorate the world's second-largest economy.
The National People's Congress Standing Committee signed off on a 6 trillion yuan increase after a five-day conclave -- held just as Donald Trump's U.S. election victory raised a threat of higher tariffs. Anticipation has been running high for stimulus measures to help China achieve this year's gross domestic product growth target of around 5%.
COMMENT – If this is the post-Trump election victory ‘bazooka’ folks were anticipating, this is likely to underwhelm and leave the Chinese economy deeply vulnerable.
2. Does Anyone Remember Peng Shuai?
Nicholas Tomaino, Wall Street Journal, October 31, 2024
The tennis star’s case affirms the dangers of engaging with China.
The Women’s Tennis Association holds its year-end championship Saturday, exactly three years since Peng Shuai alleged on Weibo, a Chinese social-media app, that former Vice Premier Zhang Gaoli had sexually assaulted her. Within 30 minutes, censors scrubbed her message, as well as others referring to it, and blocked search terms such as “Peng Shuai,” “sexual assault” and “tennis.” Ms. Peng disappeared from sight.
Weeks later, Chinese state media claimed that she denied the allegations, circulating photos and video footage that seemed stilted and coerced. When she briefly resurfaced, it was typically controlled, in at least one case visibly in the presence of a state official. The WTA suspended play in China pending a “full and transparent investigation.” CEO Steve Simon warned that “if powerful people can suppress the voices of women . . . then the basis on which the WTA was founded—equality for women—would suffer an immense setback.” “You cannot water down or compromise this type of an issue,” he later told the New York Times.
The principled stand proved costly. China had become a mainstay of the women’s tour, reportedly accounting for at least a third of its revenue in 2019. Its annual final in Shenzhen, for which the association had signed a 10-year deal, offered a record $14 million in prize money. A WTA spokesperson said it had suffered eight-figure losses in 2020 and 2021 owing to the pandemic and suspension, its year-end prize falling as low as $5 million. In March 2023 the tour announced a $150 million infusion from a private-equity firm in exchange for a 20% stake in a new commercial subsidiary.
That cushion didn’t prevent it from buckling to Beijing. “After 16 months of suspended tennis competition in China and sustained efforts at achieving our original requests, the situation has shown no sign of changing,” read an April 13, 2023, statement. Play would resume that September with a caveat: “Peng cannot be forgotten through this process.” Mr. Simon said last year that “we have received multiple confirmations that Peng is currently safe and comfortable,” but the WTA hadn’t had the “opportunity to meet with her personally.” Those in China still reportedly can’t find her allegation on search engines—and, save the scant detail that she makes “occasional appearances,” as Sports Illustrated’s Jon Wertheim has learned, it’s impossible to discern much beyond that she’s alive.
This WTA tournament will be held in Saudi Arabia, not Shenzhen, an arrangement that is “entirely incompatible with the spirit and purpose of women’s tennis and the WTA itself,” Chris Evert and Martina Navratilova wrote in a Washington Post op-ed. They opposed awarding Riyadh the event owing to its treatment of women. Billie Jean King has taken the other side: “I’m a huge believer in engagement—I don’t think you really change unless you engage,” she said last year.
The tour’s decisions, whatever the spin, seem self-evidently to have turned on the dollar. One can see why: The WTA was alone in its boycott of China, and other sports leagues never stopped reaping the rewards of unfettered access. Social-media plaudits are reassuring, but they don’t pay the bills.
As play picks up, perhaps Ms. King is right and the WTA will encourage Saudi Arabia to liberalize. The game’s leadership and fans, however, should harbor no illusions elsewhere: The case of Peng Shuai, the grand-slam champion who for three years has all but disappeared at the hands of authoritarians, leaves little reason to have the same hope for China.
COMMENT – The Chinese Communist Party has learned that it can weather the storms of public condemnation for their actions.
3. A Xi Enforcer Is Revving Up China’s Spy Machine—and Alarming the West
Chun Han Wong, Wall Street Journal, November 9, 2024
Agency accused of vast cyberattacks on U.S. has grown more powerful with trusted protégé of Chinese leader at the helm.
The Chinese intelligence agency accused of likely steering vast cyberattacks on the U.S. has made rapid gains in power and profile, driven by leader Xi Jinping and the protégé he put in charge of China’s espionage efforts against the West.
In the two years since Xi installed Chen Yixin at the helm of the Ministry of State Security, a secretive organization whose mandate includes intelligence gathering and counterespionage, Chinese spying has swelled to what Western officials describe as a formidable threat. The expansive effort, officials say, has mobilized security agencies, private firms and civilians to amass troves of information.
Chen brought the spy agency into the spotlight with a crackdown on perceived security threats from foreign firms, a social-media campaign urging vigilance against alleged U.S. efforts to subvert China and, American officials believe, an increasingly sophisticated hacking enterprise that included the recently discovered attacks linked to a group known as Salt Typhoon.
The mission, as Chen describes it, is to help China prevail in an escalating great-power competition against the U.S. The country that best marshals its resources “can win the initiative in the struggle,” he wrote in April.
As China’s spy chief, Chen has pushed the MSS well beyond its traditional domain of intelligence, airing publicly its views on security threats related to the country’s economy, foreign policy and even culture. He has sought to mobilize citizens to join a national struggle against foreign espionage—a throwback to Cold War-era appeals for a public vigilance to help catch spies.
In the Salt Typhoon breach, hackers infiltrated U.S. telecom networks and compromised the cellphone lines of the Trump and Harris campaigns and of senior U.S. government officials, potentially accessing communications between thousands of Americans and causing serious harm to U.S. national security, The Wall Street Journal has reported.
U.S. investigators have identified a Chinese contractor that they believe carried out the attack on behalf of a Chinese intelligence agency, likely the MSS, which has often used contractors for hacking missions, according to people familiar with the inquiry. Beijing has denied involvement.
COMMENT – The two Chen Yixins… one is the Minister for State Security and the other is the Singaporean actor. Guess which is which.
4. China Hack Enabled Vast Spying on U.S. Officials, Likely Ensnaring Thousands of Contacts
Dustin Volz, Aruna Viswanatha, Drew FitzGerald, and Sarah Krouse, Wall Street Journal, November 5, 2024
Hackers scooped up call logs, unencrypted texts and some audio, piercing America’s communications infrastructure.
Hackers linked to Chinese intelligence used precision strikes to quietly compromise cellphone lines used by an array of senior national security and policy officials across the U.S. government in addition to politicians, according to people familiar with the matter.
This access allowed them to scoop up call logs, unencrypted texts and some audio from potentially thousands of Americans and others with whom they interacted. The emerging picture of the intrusion’s reach helps confirm the intelligence community’s concerns about the potentially dire national security consequences of the attack, the people said.
Hackers burrowed deep into U.S. telecommunications infrastructure over eight months or more. With each layer of network infrastructure they unlocked, the Beijing-linked group studied how America’s communications wiring works without detection, carrying out targeted thefts, people familiar with the breach said.
The newly uncovered espionage campaign, earlier reported in September by The Wall Street Journal, is the latest in a long string of successes for China’s government hackers, as Western governments accuse Beijing of spying at an unprecedented scale.
But as U.S. officials and security experts piece together what the hackers—part of a group nicknamed Salt Typhoon by investigators—were able to achieve, they have assembled clues that fuel concerns that China’s mastery of cyber-espionage is dangerously advanced.
The hackers appeared to have had the ability to access the phone data of virtually any American who is a customer of a compromised carrier—a group that includes AT&T and Verizon—but limited their targets to several dozen select, high-value political and national-security figures, some of the people familiar with the investigation said.
COMMENT – Umm… I certainly hope we are going to do something about this, beyond a strongly worded démarche.
5. Chinese sanctions hit US drone maker supplying Ukraine
Demetri Sevastopulo, Kathrin Hille, and Ryan McMorrow, Financial Times, October 31, 2024
Skydio, the US’s largest drone maker and a supplier to Ukraine’s military, faces a supply chain crisis after Beijing imposed sanctions on the company, including banning Chinese groups from providing it with critical components.
Skydio is rushing to find alternative suppliers after Beijing’s move, which also blocks battery supplies from its sole provider, said people familiar with the situation.
The drone maker has sought help from the Biden administration. Chief executive Adam Bry last week met US deputy secretary of state Kurt Campbell and held discussions with senior officials at the White House.
American officials are concerned about China disrupting US supply chains and provision to Ukraine of drones used in intelligence gathering.
“This is a clarifying moment for the drone industry,” Bry wrote in a note to customers obtained by the Financial Times. “If there was ever any doubt, this action makes clear that the Chinese government will use supply chains as a weapon to advance their interests over ours.
“This is an attempt to eliminate the leading American drone company and deepen the world’s dependence on Chinese drone suppliers,” he added.
The crisis for Skydio underscores the risks facing US companies that rely on China and comes amid concern among foreign businesses about Beijing’s use of security laws to detain their local employees and carry out corporate raids in the country.
COMMENT – Expect for this to become the norm.
6. Trump’s Win Signals More Confrontation with Beijing
Brian Spegele and Austin Ramzy, Wall Street Journal, November 6, 2024
Donald Trump’s return to the White House injects new volatility into ties between the U.S. and China, threatening to transform a tense relationship between the world’s two main powers into something less predictable and more confrontational.
Trump’s election comes at a starkly different moment in U.S.-China ties than when he first took office in 2017. Prior to Trump’s first term, Washington largely played down differences with Beijing in a bid to bring China into the U.S.-led global order.
Eight years later, Democrats and Republicans have converged on a far more hawkish posture, much of that a direct result of Trump’s tough rhetoric and action against Beijing—and China’s own increasing assertiveness. President Biden has largely maintained policies from Trump’s first term, although he also talked about prioritizing stability in the relationship.
Trump is less likely to offer such platitudes. In his campaign speeches, he has at times described China as a threat and raised the idea of slapping 60% tariffs on all Chinese imports, while at others expressing admiration at Chinese leader Xi Jinping’s ability to wield power over a vast nation.
Despite their past tensions, Xi congratulated Trump on the election victory in a phone call, China’s state broadcaster reported Thursday, telling the president-elect that China and the U.S. benefit from cooperation and stand to lose from confrontation.
A day earlier, Chinese Foreign Ministry spokeswoman Mao Ning hewed to a cautious line on Wednesday, calling for mutual benefit between the two countries regardless of who is president.
7. Xi Is Better Prepared for Trump Even as 60% Tariffs Risk Chaos
Bloomberg, November 6, 2024
When Donald Trump first started a trade war with China in 2018, Beijing found itself on the back foot and unsure of how to respond. This time President Xi Jinping is better prepared for a fight, even as he has more to lose.
Trump, who won a second term as president in an election on Tuesday, has threatened to put tariffs of as much as 60% on Chinese goods, a level that Bloomberg Economics says will decimate trade between the world’s biggest economies. That’s on top of a range of export controls on advanced technology that the Biden administration has only tightened since Trump left office.
In that time, China has taken strategic steps to ensure it’s more resilient and well positioned to strike back. Key to that has been expanding its toolkit, which now includes export controls on critical raw materials, in addition to tariffs on agricultural goods and an entity list that can target key American companies.
“China, psychologically speaking, is much more prepared in dealing with him again,” said Zhou Bo, a retired senior colonel in the People’s Liberation Army and senior fellow at Tsinghua University’s Centre for International Security and Strategy. Xi has congratulated Trump on his victory and called for “healthy and sustainable” ties between the nations, state media reported.
Still, Xi would much prefer to avoid a tariff battle that risks proving much more devastating than the first round. China has relied on exports of goods like electric vehicles and batteries to buoy an economy beset by deflationary pressure and property woes, and Chinese lawmakers are meeting this week to formulate measures to bolster growth.
If Trump follows through on his tariff threats, Chinese authorities will need to do much more to help the economy. Goldman Sachs Group Inc. said last week that steeper trade restrictions on China may force Xi’s hand to bolster domestic consumption, something the Communist Party has traditionally sought to avoid.
COMMENT – I know retired senior colonel Zhou Bo and with I due respect, he might be right that Chinese leaders are more “psychologically” prepared, but the Chinese economy is FAR less prepared to deal with these challenges today than they were in 2018.
In the intervening six years, the Chinese real estate sector, which represented a quarter of the Chinese economy, has collapsed. The Chinese economy today is even more dependent on exports to keep its citizens employed than they were before and there is no market on earth that is big enough to replace the U.S. consumer market.
I’m certain, Xi and his cadres have been coming up with retaliatory measures, but they are not in a good position today and it is bound to get much worse.
Authoritarianism
8. How many foreigners work in the Chinese capital? Fewer and fewer
Josephine Ma, South China Morning Post, November 4, 2024
The pandemic is over and the government wants expatriates to work in Beijing but numbers are down on a decade ago.
With just a year to go until Beijing’s self-imposed deadline to become an international hub of innovation, just 22,000 foreigners are living and working long term in the Chinese capital.
The estimate, from a report compiled by the Beijing International Talent Exchange Association and released at a forum late last month, is well down on the 37,000 foreigners reportedly working in the city a decade ago.
The report did not give comparisons for previous years, but it said fewer foreigners had taken up long-term jobs in the city in recent years, to the point where they account for just 0.2 per cent of the capital’s workforce and 0.1 per cent of its population.
COMMENT – This is going to be a big problem for the Chinese economy… but it is something that the CCP’s security obsessed leaders are likely fine with. For them, foreigners primarily represent a threat and until that mindset changes, I wouldn’t expect these trends to change either.
9. China hands death sentence to state secrets leaker
Aljazeera, November 6, 2024
10. Hong Kong woman denied bail after allegedly damaging 55 National Day banners and posters
Irene Chan, Hong Kong Free Press, October 30, 2024
11. 4 Hong Kong men sentenced up to 3 years in jail over rioting in July 2019
Kelly Ho, Hong Kong Free Press, October 31, 2024
12. Hong Kong man jailed for 2 years over online comments linked to stabbing of police officer in 2021
Kelly Ho, Hong Kong Free Press, November 1, 2024
13. 3 Hong Kong men jailed for 28 days over squirting water at police, TVB reporters at Songkran festival
Hillary Leung, Hong Kong Free Press, November 4, 2024
14. How Do We Know What’s Happening in China?
Jeremy Wallace, Foreign Policy, November 4, 2024
15. No Way In or Out: Authoritarian Controls on the Freedom of Movement
Amy Slipowitz, Jessica White, and Yana Gorokhovskaia, Freedom House, August 2024
16. Cloaking What China Says
Alex Colville, China Media Project, October 31, 2024
This week in a study session of the Politburo, Xi Jinping talked about “innovating internet propaganda.” Part of the answer to how China plans to do this lies in its growing network of cloaked official accounts. We take a deeper look.
Before Twitter became X, the social media platform was scrupulous in labeling the accounts of media outlets from around the world that had connections to foreign governments. “State-affiliated media” labels were applied, according to the platform, to “outlets where the state exercises control over editorial content through financial resources, direct or indirect political pressures, and/or control over production and distribution.” For outlets like China Daily — run directly by China’s central government — labels had a real impact in driving down user engagement.
These days, labels on what was once Twitter are too opaque to be of much use. After first antagonizing public media like NPR in 2023 by slapping them too with the “state-affiliated” label, despite clear policies and procedures on independence, billionaire Elon Musk had his platform apply cryptic gray check-marks, indicating that accounts like that of China’s Ministry of Foreign Affairs are “government or multilateral organization account[s].” Confusing things even further, unmistakably state-affiliated accounts — like that of the CCP’s official mouthpiece, the People’s Daily — can simply override any stigma by purchasing a blue check-mark from X — leaving them simply, like millions of others, “verified.”
But even as labeling has largely become a practice of the past for social media platforms — TikTok, in fact, being the only one to actively label accounts as “China state-controlled media” — Chinese state-affiliated accounts have learned to bypass transparency efforts by using cloaked accounts or brands, masking their connections to China’s government bodies. These accounts, which interact on social media platforms as though they were independent entities, are sometimes capable of reaching millions, and even pay to amplify their messages.
Examples of such accounts are legion. “Hi, this is GBA” looks like just a social media influencer on X with more than 85,000 followers, as does “Daily Bae,” which has 1.1 million followers on Facebook. Both are external propaganda brands run by Guangdong province, and clearly identified as such in official media reports.
As Xi Jinping speaks of “building a more effective international communication system,” part of the message he conveyed this week during a collective study session of the Politburo, accounts like these, run not just by state media but by provincial and city-level international communication centers (ICCs), are a critical part of the strategy.
How do these accounts operate? We took a deep dive into one of them to get a closer look.
Who’s Speaking?
At first glance, the account “China Says” looks unassuming enough. It has a blue check and nearly 190,000 followers on X. On Facebook, it has 3.9 million followers, and its posts sometimes get millions of views. The bio section for “China Says” on X claims that the account offers “exclusive insights” into China’s foreign policy. At times, these insights appear as paid ads in X feeds like yours and mine. Much of the content on “China Says” focuses on the innocent promotion of local cuisine. But at times the account takes a sharp turn into the political. It regularly hosts explainers, for example, on China’s view of the international political system.
One recent explainer, an interview with Danish photographer Jan Oberg, who has featured frequently (and almost exclusively) in Chinese state media reports, was framed with the loaded question: “Is China’s approach to global peace the antidote to Western militarism?” Another post features “Quotes from Xi Jinping” that urge “global governance reform.” Yet another, a program called “Diplomacy Talk,” again portrays China as an enlightened force in the global South: “China offered hope when the West labeled Africa ‘hopeless,’” it begins.
The nature of this content, and the account name “China Says,” might offer a clue as to origins. But exactly who is speaking here?
In fact, “China Says” is operated by the Chinese Internet News Center (中国互联网新闻中心), an institution directly under China’s State Council Information Office (SCIO). The SCIO is essentially the same office as the Chinese Communist Party’s Central Propaganda Department — which means that this “news and media website,” as it is labeled on Facebook, is speaking from the very center of the Chinese party-state. And yet, quite unlike the account for China Daily, also under the SCIO, the account bears no “China state-controlled media” label.
17. Experience vs. Connections: What’s More Important for Getting Ahead in the CCP?
Stanford SCCEI China Briefs, Substack, November 4, 2024
18. China's bid to boost births doesn't make sense for many young women
Lucie Lo, RFA, October 30, 2024
19. In Shanghai, Halloween Passes Quietly a Year After Boisterous Celebrations
Shen Lu and Clarence Leong, Wall Street Journal, October 31, 2024
20. Can Men in China Take a Joke? Women Doing Stand-Up Have Their Doubts.
Vivian Wang, New York Times, October 31, 2024
21. AstraZeneca Probe in China Adds to Concerns for Foreign Businesses
Yoko Kubota and Joseph Walke, Wall Street Journal, October 31, 2024
22. Tiny Homes Face the Ax in Hong Kong, Leaving Many Families Worried
Tiffany May, New York Times, November 5, 2024
U.S.-China Economic and Security Review Commission, October 31, 2024
Environmental Harms
24. Turkey to ditch Siemens for China contractor to build nuclear plant
Al-Monitor, November 1, 2024
25. China resists mounting pressure to do more on climate change
Christian Shepherd and Maxine Joselow, Washington Post, October 31, 2024
China is defying pressure to set ambitious climate targets early and to help poor nations cope with the ravages of a warming world.
With less than a month before the annual U.N. Climate Change Conference, China is so far defying pressure to set ambitious climate targets early and to do more to help poor nations cope with the ravages of a warming world.
The United States, other Western countries and some low-lying island nations have been pressing China to take on more responsibility in advancing global climate goals ahead of the conference, according to some veteran climate negotiators and leading Chinese experts. They say they want Beijing to spell out soon how it will slash its planet-warming greenhouse gas emissions over the next decade. They also say they want China to contribute more cash to help poor countries address the catastrophic impacts of climate change, including rising seas and stronger storms.
But China, despite being the world’s leading producer and installer of renewable energy, remains resistant to outside pressure on climate action, according to the negotiators and experts.
Recent assessments from top climate scientists have found that only drastic action can keep alive the Paris agreement’s goal of limiting global warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit) — a threshold Earth may have already crossed. Only a rapid transition away from fossil fuels by mid-century could sustain the crucial goal, according to the U.N. Intergovernmental Panel on Climate Change.
The United States and China — the world’s two biggest emitters of greenhouse gases — typically play an outsize role at the U.N. Climate Change Conference. At this year’s talks — scheduled to start Nov. 11 in Baku, Azerbaijan — experts said joint commitments from the two superpowers could cajole other countries to set their own stronger climate targets.
But a September visit to China by John D. Podesta, senior adviser to President Joe Biden for international climate policy, did not yield the kind of joint action between Washington and Beijing that has catalyzed broader breakthroughs in previous talks.
26. China Confronts Europe Over Climate-Based Trade Restrictions
Max Bearak, New York Times, November 5, 2024
Days ahead of the U.N.’s global negotiations on climate change, China and other developing countries said trade restrictions should be part of the talks.
Before they even started, next week’s talks over the world’s collective response to climate change got even more complicated with an 11th-hour move by China on Tuesday.
Writing on behalf of a group of large, industrializing countries, including India, Brazil and South Africa, the Chinese delegation to this year’s United Nations-sponsored climate summit, called COP29, which starts next week in Azerbaijan, lodged a request that the meeting’s agenda include discussion of “unilateral restrictive trade measures.”
The move is directed squarely at the European Union, which, by next year, is planning to implement two laws that would impose fees on the import of goods that have high climate costs, whether through carbon emissions or deforestation.
A spokesman for the United Nations’ climate body confirmed it had received China’s agenda submission.
Because COP29’s agenda must be agreed upon by consensus, each new submission for a discussion item threatens to mire the talks in a prolonged squabble, leaving less time to hammer out a resolution that, while nonbinding, would reflect a set of objectives shared by all participating countries.
E.U. representatives have argued in the past that trade issues belong at annual meetings of the World Trade Organization, even if trade and climate are closely linked. E.U. countries already pay carbon taxes, and the 27-country-body says it is pushing through measures to prevent its industries from being undercut by cheaper imports that don’t adhere to their standards on emissions reductions.
New E.U. tariffs of up to 45.3 percent on Chinese electric-vehicle imports also came into effect last week, prompting China’s commerce industry to file a lawsuit on Monday with the W.T.O.
COP29’s agenda is expected to largely focus on what rich countries, whose carbon-intensive development has fueled climate change, owe poorer ones that are more vulnerable to climate change’s effects.
Foreign Interference and Coercion
27. China 'compromised' Canadian government networks and stole valuable info: spy agency
Catharine Tunney, CBC, October 30, 2024
China-sponsored threat actors have infiltrated at least 20 networks associated with federal government: CSE.
Threat actors sponsored by China "compromised" Canadian government networks over the past five years and collected valuable information, says a new report from Canada's cyber spy agency.
The Communications Security Establishment, responsible for foreign signals intelligence, cyber operations and cyber security, released its updated national cyber threat assessment on Wednesday. The assessment flags threats the agency sees as the most pressing ones facing individuals and organizations in Canada.
"We're often asked, what keeps up at night? Well, pick the page," Caroline Xavier, CSE chief, told a news conference in Ottawa.
CSE's latest report, which casts ahead to the 2025-2026 fiscal year, names the People's Republic of China (PRC) as "the most comprehensive cyber security threat facing Canada today" and says the scale, tradecraft and ambitions China demonstrates online are "second to none."
The report says Chinese state-sponsored actors repeatedly conduct cyber espionage campaigns against federal, provincial, territorial, municipal and Indigenous government networks in Canada.
"PRC cyber threat actors have compromised and maintained access to multiple government networks over the past five years, collecting communications and other valuable information," said CSE.
At least 20 networks associated with government of Canada agencies and departments have been compromised by PRC cyber-threat actors, said the agency.
"While all known federal government compromises have been resolved, it is very likely that the actors responsible for these intrusions dedicated significant time and resources to learn about the target networks," says the report.
China targets government networks and public officials to obtain advantages in China-Canada bilateral relations and commercial matters, said CSE.
28. China-linked hackers tasked with Japanese targets pursue them through Europe
Alexander Martin, The Record, November 7, 2024
MirrorFace, a hacking group that researchers believe is aligned with China, has been spotted targeting a diplomatic organization in the European Union for the first time.
The Slovak cybersecurity company ESET described the incident on Thursday in its latest quarterly report, noting the move marks an expansion in the threat group’s range of targets which have historically been restricted to entities in Japan.
Although the identity of the target diplomatic organization wasn’t disclosed, the lure document in the spearphishing email maintained a Japanese theme, encouraging the target to download a document titled “The EXPO Exhibition in Japan in 2025.”
“Even considering this new geographic targeting, MirrorFace remains focused on Japan and events related to it,” reported ESET.
It follows Japanese authorities warning in July of an expansion in activities linked to MirrorFace. While the hackers focused initially on gaining access to “media, political organizations, think-tanks and universities” in the country, they were increasingly also including “manufacturers and research institutions.”
ESET wrote: “MirrorFace operations against its usual targets didn’t stop. We continued to see the threat actor targeting various Japanese organizations, such as a research institute and a political party.”
Alleged targeting of Japanese institutions by China-linked threat groups has increased in recent years. Last August, Japan’s own cybersecurity agency announced that it itself had been hacked, with the attackers potentially accessing sensitive data for nine months before being discovered.
Japan did not publicly attribute the incident to a specific threat actor. However, a report by the Financial Times, citing three government and private sector sources familiar with the situation, said that state-backed Chinese hackers were suspected of being behind the attack.
That followed a report by the Washington Post that the U.S. National Security Agency discovered Chinese military hackers had compromised Japan’s defense networks back in 2020, described as “one of the most damaging hacks” in Japan’s history.
29. U.S. Agency Warns Employees About Phone Use Amid Ongoing China Hack
Anna Maria Andriotis and Dustin Volz, Wall Street Journal, November 7, 2024
Consumer Financial Protection Bureau tells workers to reduce use of cellphones for work due to risk from China-linked telecom intrusion.
A federal agency has issued a directive to employees to reduce the use of their phones for work matters because of China’s recent hack of U.S. telecommunications infrastructure, according to people familiar with the matter.
In an email to staff sent Thursday, the chief information officer at the Consumer Financial Protection Bureau warned that internal and external work-related meetings and conversations that involve nonpublic data should only be held on platforms such as Microsoft Teams and Cisco WebEx and not on work-issued or personal phones.
“Do NOT conduct CFPB work using mobile voice calls or text messages,” the email said, while referencing a recent government statement acknowledging the telecommunications infrastructure attack. “While there is no evidence that CFPB has been targeted by this unauthorized access, I ask for your compliance with these directives so we reduce the risk that we will be compromised,” said the email, which was sent to all CFPB employees and contractors.
The alert is the latest demonstration of concerns within the federal government about the scale and scope of the hack, which investigators are still endeavoring to fully understand and have attributed to a group dubbed Salt Typhoon.
The hackers are said to have compromised data about calls and in some cases recorded phone audio from certain high-value targets, including individuals affiliated with both the Trump and Harris presidential campaigns.
It wasn’t clear if other federal agencies had taken similar measures or were planning to, but many U.S. officials have already curtailed their phone use due to the hack, according to a former official. “There is a general reticence to use their cellphones,” the former official said.
30. Chinese see 'no turning back' for U.S. ties regardless of election result
Stella Yifan Xie, Nikkei Asia, November 6, 2024
31. Joint Russia sea drills signal start of Indonesian foreign policy shift
Japan Times, November 3, 2024
32. China’s expanding role in the Middle East
Mauricio D. Aceves, Gateway House, October 28, 2024
33. Inside a Firewall Vendor's 5-Year War with the Chinese Hackers Hijacking Its Devices
Andy Greenber, The Wired, October 31, 2024
34. China’s Typhoon hacks ahead of U.S. election spurred by elite competition
Cate Cadell, Washington Post, November 2, 2024
Human Rights and Religious Persecution
35. Heavy Jail Sentences Against Falun Gong Practitioners in Southern Mongolia
Yang Feng, Bitter Winter, November 5, 2024
36. The CCP Insists that Chinese Islam Should Be “Confucianized”
Ma Wenyan, Bitter Winter, November 4, 2024
37. Tibetan activist detained for exposing illegal sand, gravel mining
RFA, November 1, 2024
Chinese authorities have detained a Tibetan environmental activist from Sichuan province after he made a rare public appeal on social media for action against a company he accused of illegally extracting sand and gravel from a river, two Tibetan sources said.
On Oct. 15, Tsogon Tsering from Tsaruma village in Kyungchu county posted a five-minute video on WeChat in which he accused Anhui Xianhe Construction Engineering Co. of causing extensive environmental damage to the Kyungchu River, including severe soil erosion and reduced water levels.
Two days after his public appeal — a rare action in Tibet, where speaking out against authorities or state-approved projects often leads to reprisals — officials summoned Tsering, 29, and other villagers for questioning.
They were all initially released back to their homes, but Tsering was summoned again and detained “a day or two after” Oct. 20, said the sources, who live in Tibet and in exile, respectively.
Tsering has remained in custody since then, added the sources, who declined to be named out of fear of reprisals by Chinese authorities.
“His family and fellow villagers are concerned about him and are hoping for his release, as they say he has committed no crime,” said the Tibetan inside the region.
COMMENT - This is why I’m deeply dubious of any environmental commitments by the Chinese Communist Party… without the rule of law and a free press, this is the outcome we are likely to see.
38. US blacklists 3 more Chinese textile firms over Uyghur slave labor
Alex Willemyns, RFA, November 1, 2024
39. Hong Kong’s Esquel Group Added to U.S. Forced Labor Ban List
Richard Vanderford, Wall Street Journal, October 31, 2024
40. Entire Village of the Yi Ethnic Minority “Deprogrammed” in Yunnan
Mo Yuan, Bitter Winter, November 6, 2024
When the authorities learned that the banned Association of Disciples had converted all villagers in Jiciping, reeducation was entrusted directly to the police.
Industrial Policies and Economic Espionage
41. Chinese Hedge Fund Manager Indicted by US in Trade Secrets Case
Bloomberg, November 4, 2024
42. Trump's election win could take the U.S.-China chip war to a new level
Britney Nguyen, Quartz, November 6, 2024
Since President-elect Donald Trump’s first term in office, the U.S. has wielded its trade restriction and sanctioning powers in an effort to curb China’s technological advances. Now that he’s headed back to the White House, the semiconductor war between the U.S. and China could escalate.
43. Chinese Red Tape Leaves Billions of Dollars of Deals in Limbo
Dong Cao, Julia Fioretti, and Dave Sebastian, Bloomberg, November 4, 2024
44. Huawei’s new made-in-China software takes on Apple and Android
The Economist, November 5, 2024
45. State treasurers push for divestment from China citing 'red flags' regarding CCP control
Jamie Joseph, Fox News, November 1, 2024
46. China's students pay for internships in hypercompetitive job market
Kentaro Shiozaki, Nikkei Asia, November 5, 2024
47. Biden Administration Finalizes Controls on U.S. Investment in China
Jason C. Chipman, Jeffrey I. Kessler, Lauren Mandell, Neena Shenai, and Jake A. Laband, WilmerHale, November 4, 2024
48. Chinese Logistics Operators Are Getting into U.S. Warehousing
Liz Young, Wall Street Journal, November 4, 2024
49. Temu Faces EU Probe Over Failure to Stop Illegal Sales
Dominic Chopping, Wall Street Journal, October 31, 2024
50. Export controls failed to keep cutting-edge AI chips from China’s Huawei
Katrina Northrop and Eva Dou, Washington Post, November 1, 2024
51. Chipmaker GlobalFoundries Faces $500,000 Fine for Banned Shipments to China
Ana Swanson, New York Times, November 1, 2024
The Biden administration said it had reached a settlement after the U.S. chipmaker voluntarily disclosed that it had shipped products to a firm linked with China’s military industrial complex.
The Biden administration said on Friday that it would impose a fine of $500,000 on the U.S. chipmaker GlobalFoundries, after the company shipped more than $17 million of products to a Chinese company on a restricted trade list.
The Bureau of Industry and Security, which oversees U.S. technology controls on China, said GlobalFoundries had sent 74 different shipments of wafers, thin slices of silicon used in chip-making, to SJ Semiconductor, a company in eastern China, from February 2021 to October 2022.
The United States added SJ Semiconductor to the so-called entity list in December 2020 for its ties to Semiconductor Manufacturing International Corporation, China’s most advanced chip manufacturer. The Commerce Department said at the time that SMIC had ties with China’s military industrial complex and posed a threat to U.S. national security.
Once a firm is on the entity list, American companies are required to obtain a special license from the Commerce Department before shipping any technology. SJS was not properly identified in GlobalFoundries’ screening system as a result of a data error, and was not screened, the government said.
COMMENT – This is ri-goddamn-diculous… $17 million in sales and they are paying a $500,000 fine?!?
You have to be kidding.
This is why our export control regime is failing… the utter unwillingness of Commerce Department regulators and law enforcement officers to hold companies accountable for endangering U.S. national security.
Unless and until Commerce and their Bureau of Industry and Security gets more serious (and become ‘un-captured’ by the semiconductor industry they are supposed to regulate), we will continue to have these failures.
52. How China’s smaller private firms may be paying the price for huge local government debts
Meredith Chen, South China Morning Post, November 3, 2024
53. China’s housing market nightmare is nowhere near over as owners eye quick exits
Daniel Ren, Yulu, Ao, and Yuke Xie, South China Morning Post, November 2, 2024
54. China’s Coming Stimulus Is Necessary but Likely Insufficient
Jacky Wong, Wall Street Journal, November 4, 2024
55. U.S. Chip Toolmakers Move to Cut China from Supply Chains
Liza Lin and Asa Fitch, Wall Street Journal, November 4, 2024
56. China's messy EV dispute with Europe keeps trade tensions in check
Joe Cash and Laurie Chen, Reuters, November 4, 2024
57. Iran oil prices to China at multi-year high after exports fall, sources say
Chen Aizhu, Reuters, November 5, 2024
58. China’s yuan falls sharply as Donald Trump declares US election win
Ji Siqi, South China Morning Post, November 7, 2024
59. TikTok Maintains Solid First-Half Revenue Growth Despite U.S. Ban Threat
Juro Osawa and Jing Yang, Information, November 4, 2024
60. China, Australia sign avocado agreement at Shanghai expo amid warming ties
Kandy Wong and Mandy Zuo, South China Morning Post, November 6, 2024
61. Shenzhen to invest US$1.7 billion in economy for flying cars, drones by 2026
Iris Deng, South China Morning Post, November 6, 2024
62. China will work with US, government says, but more rivalry expected under Trump
Laurie Chen, Reuters, November 6, 2024
63. China's markets drop as Trump presidency looms
Summer Zhen and Jiaxing Li, Reuters, November 6, 2024
64. As US election comes to a close, 1 thing is certain: more tariffs on China
Kinling Lo and Xinyi Wu, South China Morning Post, November 6, 2024
Cyber & Information Technology
65. AI’s $1.3 Trillion Future Increasingly Hinges on Taiwan
Jane Lanhee Lee and Vlad Savov, Bloomberg, October 30, 2024
66. The Biden Administration’s Export Controls at Two: Challenges and Gains
Adrian Ang U-Jin, RSIS, November 7, 2024
In 2022, the Biden administration leveraged the United States’ strategic command over critical “chokepoints” in the global semiconductor value chain to impose sweeping export controls denying China access to advanced AI chips and the wherewithal to manufacture advanced semiconductors. Two years on, Washington continues to face challenges in enforcing the embargo even as Beijing has made limited progress in indigenising a semiconductor supply chain that is immune to US sanctions.
COMMENTARY
In late October 2024, Taiwan Semiconductor Manufacturing Company (TSMC) announced that it had suspended shipments to at least two clients and notified the US Commerce Department over potential violation of US sanctions following revelations that Huawei’s Ascend 910B AI processor contained a 7-nm chip manufactured by TSMC. Huawei had been placed on the US Commerce Department’s Entity List in 2019.
The identity of the TSMC clients and their relationship with Huawei remains unknown, but the episode highlights both the challenges Washington faces in enforcing its export control regime restricting China’s access to advanced AI chips and the wherewithal to develop and manufacture its own advanced chips and the difficulties that Beijing confronts in successfully indigenising a semiconductor supply chain that is immune to US sanctions.
“Lax Monitoring”, Smuggling, and Loopholes
The TSMC/Huawei incident has prompted accusations of “lax monitoring” of export control compliance by the Commerce Department. There is evidence that Taiwan continues to ship advanced chips to the mainland despite US export control enforcement efforts and that smuggling fuels a lucrative black market for embargoed chips. Recent reporting by the Wall Street Journal and the New York Times indicates that chips and entire servers are available in underground markets in China, while Reuters reported that Chinese universities, research institutes and institutions linked to the People’s Liberation Army (PLA) acquired high-end Nvidia chips through black market “resellers”.
Chinese end-users have also been able to exploit a loophole to access restricted advanced chips and AI technology via cloud services provided by US tech giants such as Amazon, Meta, Google, and Microsoft. PLA researchers were apparently able to use Meta’s publicly available Llama model to develop a military task-focused chatbot. The Commerce Department’s attempt to close the loophole with a proposed “know your customer” requirement to verify the identities of foreign users faced stiff industry pushback. While legislation empowering the Commerce Department to regulate remote access to US technology cleared the US House of Representatives during “China Week” in September, it faces an uncertain path to becoming law.
67. Huawei Sales Rises 16% on Strong Demand for Its Phones and Chips
Bloomberg, October 31, 2024
68. Apple asks Foxconn to produce servers in Taiwan in AI push
Lauly Li and Cheng Ting-fang, Nikkei Asia, November 6, 2024
69. Huawei courts global chip talent with new Shanghai R&D hub
Itsuro Fujino, Nikkei Asia, November 5, 2024
70. Did U.S. Semiconductor Export Controls Harm Innovation?
Andreas Schumacher, CSIS, November 5, 2024
71. China's rising display industry could hurt US national security, report warns
Stephen Nellis, Reuters, October 31, 2024
72. Chinese researchers develop AI model for military use on back of Meta's Llama
James Pomfret and Jessie Pang, Reuters, November 1, 2024
73. Tencent renews partnership with Bosch for deeper smart car collaboration
Iris Deng, South China Morning Post, November 4, 2024
74. China's DeepRoute.ai raises $100 mln as smart driving adoption speeds up
Reuters, November 3, 2024
75. Mystery Surrounds Discovery of TSMC Tech Inside Huawei AI Chips
Yang Jie and Joyu Wang, Wall Street Journal, November 5, 2024
76. China’s Huawei pushes network gear upgrades in friendly nations, touting AI boost
Iris Deng, South China Morning Post, November 5, 2024
77. TikTok Sees Trump Victory as App’s Best Hope
Juro Osawa and Kaya Yurieff, Information, November 5, 2024
78. Canada orders shutdown of TikTok's Canadian business, app access to continue
Ismail Shakil, Reuters, November 6, 2024
Canada on Wednesday ordered Chinese-owned TikTok's business in the country to be dissolved, citing national-security risks, but added the government was not blocking Canadians' access to the short-video app or their ability to create content.
"The government is taking action to address the specific national security risks related to ByteDance Ltd's operations in Canada through the establishment of TikTok Technology Canada Inc," Innovation Minister Francois-Philippe Champagne said in a statement.
Ottawa last year began reviewing TikTok's plan to invest and expand its business in Canada. ByteDance is TikTok's Chinese parent company.
Under Canadian law, the government can assess potential risks to national security from foreign investments, such as the TikTok proposal. The law prevents the government from revealing the details of such investments.
"The decision was based on the information and evidence collected over the course of the review and on the advice of Canada's security and intelligence community and other government partners," Champagne added.
Military and Security Threats
79. VIDEO – Deep Intel on INDOPACOM's Plan to Defeat China
Admiral Sam Paparo and Ward Carroll, November 2, 2024
Admiral Sam Paparo, the Commander of U.S. Indo-Pacific Command, joins the channel for an in-depth discussion of his roles, responsibilities, and plan to deter and defeat China from a position of numerical inferiority.
80. Japan national security adviser visits China, eyeing Ishiba-Xi talks
Yukio Tajima, Nikkei Asia, November 4, 2024
81. Why Chinese spies are sending a chill through Silicon Valley
James Titcomb, The Telegraph, November 3, 2024
82. In some areas of military strength, China has surpassed America
The Economist, November 4, 2024
83. Is China Furthering Its Purge of the Defense Industry? Here’s What to Watch.
K. Tristan Tang, The Diplomat, November 5, 2024
84. China’s ‘mind-boggling’ space capabilities worry US, says Space Force chief
Joshua Posaner, Politico, October 31, 2024
85. China Faces a Dilemma with North Korean Troops Pouring into Russia
Timothy W. Martin and Austin Ramzy, Wall Street Journal, November 3, 2024
86. U.S. to Expand National-Security Reviews of Real-Estate Deals Near Military Bases
Alexander Ward and Richard Vanderford, Wall Street Journal, November 1, 2024
87. China to import Russian tech and expertise to boost low-altitude defences: state media
Sylvie Zhuang, South China Morning Post, November 6, 2024
88. Xi Jinping visits PLA paratroopers whose mission is to ‘liberate Taiwan’
Enoch Wong, South China Morning Post, November 6, 2024
89. Chinese navy to show off its warplanes for first time at Zhuhai air show
Seong Hyeon Choi and Liu Zhen, South China Morning Post, November 6, 2024
One Belt, One Road Strategy
90. 2024 FOCAC Beijing Summit: A new chapter?
Yun Sun, Brookings, November 5, 2024
91. Responding to China’s Growing Influence in Ports of the Global South
Daniel F. Runde, Austin Hardman, and Clara Bonin, CSIS, October 30, 2024
92. Chinese warships could use Peru’s big new port, US general warns
Michael Stott, Financial Times, November 4, 2024
93. China’s EV Makers Set Sights on Latin America in Global Expansion
Samantha Pearson, Wall Street Journal, November 2, 2024
Opinion Pieces
94. Xi May Lose His Gamble
Michael Schuman, Atlantic, November 3, 2024
The revelation that North Korean troops have been gathering in Russia, ostensibly to assist President Vladimir Putin in his brutal invasion of Ukraine, has stoked Western fears of autocratic states banding together to undermine the interests of democracies. There is an authoritarian coalition, but it’s rickety—and it depends on China’s tolerance for chaos.
The war in Ukraine has been a showcase for cooperation among four states—Russia, China, Iran, and North Korea—that share an antipathy toward the United States and the international order it represents. Since invading its neighbor in 2022, Russia has sourced drones and missiles from Iran. In October, Washington sanctioned Chinese companies for working with Russian firms to produce drones. According to U.S. officials, China has also been supplying Russia with vital components that help sustain its war machine. And now North Korean troops have come to Russia, where, Ukrainian officials believe, they are preparing to join the invading forces. U.S. Defense Secretary Lloyd Austin said that if the troops did participate in the war, it would be a “very, very serious issue” with potential implications in both Europe and Asia.
95. Sinophobia and U.S. Election Lies
Stephen S. Roach, The Wire China, November 3, 2024
The current political climate in the U.S. is harming its relations with China.
The Big Lie has become bigger. The false claim of a rigged, stolen 2020 U.S. presidential election embraced by Donald Trump and his cult has brought about the end of fact-based accountability. This is having profound and lasting implications on a deeply troubled Sino-American relationship.
Amid the toxic atmospherics of the Big Lie, Sinophobia, or irrational fears of China, have now taken on a life of their own. The anti-China mindset has intensified to a state of near paranoia in the United States. Examples include any one of a number of alleged threats: Chinese-made electric vehicles (EVs) and dock-loading cranes; the vulnerability of U.S. infrastructure to a so-called Volt Typhoon hacking network; national security concerns over the feared back door of Huawei’s 5G network; and the potential of TikTok to assault the character and privacy of innocent American teenagers.
I have argued that these fears originate in false narratives aligned with America’s anti-China political agenda. Such narratives are not pulled from thin air. They reflect projections from the distorted facts of what academic psychologists call a “narrative identity” which “reconstructs the autobiographical past.” In the U.S., that past unfortunately reflects an ugly strain of identity politics traceable to a long history of racial and ethnic prejudice. To be sure, as I also detail in my book, Accidental Conflict, China is equally guilty of embracing and promoting false narratives about America to suit its own purposes.
In examining the corrosive effect of false narratives on the China debate in the U.S., I have stressed the important distinction between the potential to inflict harm based on circumstantial evidence and conjecture, and the intent to do so based on the “smoking gun” of hard evidence. In the era of the Big Lie, the recently exaggerated fears of Sinophobia largely fall in the former category.
For example, U.S. Secretary of Commerce Gina Raimondo asked Americans to imagine what might happen if Chinese EVs were turned into destructive weapons on U.S. highways. FBI Director Christopher Wray warned of an attack on critical infrastructure if China decides to activate its embedded malware. Fears that China will invade Taiwan in 2027 reflect a dated hunch by retired Admiral Phil Davidson, former head of the U.S. Indo-Pacific Command. The key words — imagine, if, and hunch — speak volumes to the dangers of acting on the circumstantial evidence of conjecture.
COMMENT – Stephen Roach has gone full-on hysterical.
Might it be the neo-Maoist political climate ushered in by Xi Jinping a decade ago that has harmed relations with the United States and nearly all of the PRC’s neighbors.
96. China bulls are usually wrong because China is often wrong
Donald Low, Nikkei Asia, November 4, 2024
97. China’s chip chokepoints
Matt Brazil, Matt Bruzzese, and Peter W. Singer, Defense One, October 27, 2024
98. Americans, your calls and texts can be monitored by Chinese spies
Josh Rogin, Washington Post, November 2, 2024
The U.S. government and the telecom companies need to share more information.
Last week, the Chinese hacking and spying operation known as “Salt Typhoon” was revealed to have targeted former president Donald Trump and his running mate, Sen. JD Vance of Ohio, as well as staffers for Vice President Kamala Harris’s campaign and for Congress. The Post has reported that the hackers were able to collect audio and text messages from their targets in a wide-ranging espionage operation, which likely began several months ago.
But what is less well understood, according to six current and former senior U.S. officials I spoke with from both parties, all of whom were briefed by the U.S. intelligence community on the operation, is that the threat is much broader. The Chinese hackers, who the United States believes are linked to Beijing’s Ministry of State Security, have burrowed inside the private wiretapping and surveillance system that American telecom companies built for the exclusive use of U.S. federal law enforcement agencies — and the U.S. government believes they likely continue to have access to the system. Millions of mobile-phone users on the networks of at least three major U.S. carriers could thus be ongoingly vulnerable to Chinese government surveillance.
The U.S. government and the telecom companies that are dealing with the breach have said very little publicly about it since it was first detected in August, leaving the public to rely on details trickling out through leaks. If millions of Americans are vulnerable to Chinese surveillance, they have a right to know now. More information needs to be shared, despite the sensitivity of the issue, the close timing to the election and what remains unknown.
The officials I spoke with, most of whom were not allowed to speak on the record because the hack is being investigated by an interagency team, described a scramble inside the U.S. government to respond to the breach. Several officials told me that targets identified by the intelligence community also include senior U.S. government officials and top business leaders.
“It is much more serious and much worse than even what you all presume at this point,” Senate Intelligence Committee Chairman Mark R. Warner (D-Virginia) said. “It is one of the most serious breaches in my time on the Intelligence Committee.”
The so-called lawful-access system breached by the Salt Typhoon hackers was established by telecom carriers after the terrorist attacks of Sept. 11, 2001, to allow federal law enforcement officials to execute legal warrants for records of Americans’ phone activity or to wiretap them in real time, depending on the warrant. Many of these cases are authorized under the Foreign Intelligence Surveillance Act (FISA), which is used to investigate foreign spying that involves contact with U.S. citizens. The system is also used for legal wiretaps related to domestic crimes.
It is unknown whether hackers were able to access records about classified wiretapping operations, which could compromise federal criminal investigations and U.S. intelligence operations around the world, multiple officials told me. But they confirmed the previous reporting that hackers were able to both listen in on phone calls and monitor text messages.
The officials said the number of compromised targets identified in the investigation is growing. Multiple officials briefed by the investigators told me the U.S. government does not know how many people were targeted, how many were actively surveilled, how long the Chinese hackers have been in the system, or how to get them out.
“Right now, China has the ability to listen to any phone call in the United States, whether you are the president or a regular Joe, it makes no difference,” one of the hack victims briefed by the FBI told me. “This has compromised the entire telecommunications infrastructure of this country.”
The Wall Street Journal first reported on Oct. 5 that China-based hackers had penetrated the networks of U.S. telecom providers and might have penetrated the system that telecom companies operate to allow lawful access to wiretapping capabilities by federal agencies. On Oct. 10, the leaders of the House Select Committee on the Chinese Communist Party sent a letter to the chief executives of Verizon, AT&T and Lumen Technologies asking them when they detected the attack and what they were doing about it.
Rep. Raja Krishnamoorthi (Illinois), the ranking Democrat on the committee, told me during an interview that Congress and the federal government spent years working to keep Chinese technology out of the U.S. telecom system for fear Beijing might use it to spy on Americans. Now, Chinese intelligence might have outmaneuvered them by breaking in through the back door, he said.
There’s no evidence yet that Beijing plans to use any information collected to interfere in U.S. politics or Tuesday’s presidential election, though it remains a concern, Krishnamoorthi told me. But short of that, Beijing could still use these operations to hurt the United States in several ways, he said. The Chinese government could use its infiltration of U.S. telecom networks to disable them during warfare, for instance. The information collected from Americans could be used for blackmail or disinformation campaigns.
“Not only are they potentially inserting malware to disrupt our telecommunications networks. On top of that, it’s a surveillance system,” the congressman told me.
Krishnamoorthi said he believes the companies have a moral and perhaps a legal obligation to inform their customers about a breach of this nature. Americans can only change their practices — by relying more on encrypted apps, for instance — if they are aware of the threat, he said.
“How long have [the hackers] been doing this? What are we doing to combat it? What is the price to pay for them doing that? ... I haven’t received any definitive answers,” he said. “We want people to know and then to be able to take countermeasures to protect themselves.”
A Verizon spokesperson told me the company was working with federal law enforcement “to confirm, assess and remediate any potential impact” of the reported breach. Lumen declined to comment, and AT&T did not respond to a request for comment.
The White House has also said nothing about the breach. The National Security Council declined to comment, and the FBI did not respond to a request for comment. On Oct. 25, the FBI and the Cybersecurity and Infrastructure Security Agency (CISA) released a brief statement stating that the U.S. government was investigating “unauthorized access to commercial telecommunications infrastructure by actors affiliated with the People’s Republic of China.”
That same day, the FBI notified 40 victims of Salt Typhoon, according to multiple officials. The FBI informed one person who had been compromised that the initial group of identified targets included six affiliated with the Trump campaign, this person said, and that the hackers had been monitoring them as recently as last week. According to that individual, Trump, Vance, Eric Trump, Jared Kushner and two other Trump campaign advisers were told they had been surveilled.
“They had live audio from the president, from JD, from Jared,” the person told me. “There were no device compromises, these were all real-time interceptions.”
Vance publicly confirmed that his and Trump’s phones were “hacked by Chinese hackers” during his interview with podcaster Joe Rogan released on Thursday. “They only got some offensive memes and me telling my wife to buy more milk at the grocery store,” he said. “They couldn’t get my encrypted messages; I use Signal and iMessage.”
Vance was correct to say that encrypted apps and iMessage are not affected by the hack, so long as they are used over WiFi rather than over cellular networks. But Vance’s confidence that Chinese hackers did not gain useful material could be unfounded, because the duration of the surveillance is believed to date back to last year.
Vance told Rogan the Chinese hackers cracked a “backdoor telecom infrastructure that was developed in the wake of the Patriot Act.” Many in the MAGA wing of the Republican Party have long criticized the federal government’s use of post-9/11 legal authority to surveil Americans. The use and alleged abuse of FISA warrants to surveil Trump campaign members were the basis of Trump’s (incorrect) claim that President Barack Obama spied on him in 2016.
Though the Chinese hack is not connected to that directly, Republicans are sure to point to this breach to reopen the debate over the safety and management of the FISA system. The Trump campaign is already blaming the Biden administration for the breach. “Kamala Harris and Democrats have continued to engage in election interference and will stop at nothing, including emboldening China and Iran attacking critical American infrastructure, to prevent President Trump from returning to the White House,” Trump campaign communications director Steven Cheung told me.
The Harris campaign declined to comment. Sources in both camps tell me that top officials have been warned about the vulnerability and are adjusting their communications practices in response.
Chinese hacking and spying operations are hardly new. For example, since 2021, the U.S. government has been tracking a separate Chinese operation known as Volt Typhoon, which sought to embed itself in critical infrastructure within U.S. manufacturing, construction and information technology. But telecom infrastructure in the United States was considered more secure, until now.
“Chinese intelligence is targeting critical nodes that make our entire system vulnerable and give them unprecedented ability to target individual Americans,” Peter Mattis, a former counterintelligence official and president of the Jamestown Foundation, a Washington think tank, told me. “Breaches like this showcase their world-class sophistication and the necessity of taking Chinese intelligence seriously.”
Based on what is already known, this breach represents a major failure of the telecom companies and the U.S. government to protect critical infrastructure, as is their joint responsibility. But the blame game can wait. Right now, the American people need to know more about the ongoing threat to their privacy. And the Chinese government needs to pay a cost, or Beijing will conclude there is no risk in continuing to surveil Americans’ private communications.